Datuk Seri Johari Abdul Ghani, chairman of the 1MDB Asset Recovery Taskforce, said that the agreement signed between the Malaysian government and Goldman Sachs Group Inc in 2020 regarding the recovery of 1Malaysia Development Bhd (1MDB) assets was vague and lacked detail.
According to Johari, this ambiguity has led to a dispute between the parties, particularly concerning Goldman Sachs’ reluctance to fulfill its asset recovery guarantee of US$1.4 billion to the Malaysian government.
Johari explained that while an agreement was reached in 2020, Goldman Sachs refused to pay the promised US$1.4 billion, citing ambiguities in the agreement. The firm argued that Malaysia had already collected significant fines from AmBank and settlements from the Department of Justice (DOJ), which it believed offset its obligations under the recovery guarantee.
“It (Goldman Sachs) took advantage by refusing to pay US$1.4 billion because it said that we had collected through AmBank, a fine of US$640 million. Then, we received about US$430 million from the DOJ (Department of Justice).” Johari said.
However, Johari asserted that the fines and settlements received by Malaysia were not part of the scope of the US$1.4 billion recovery guarantee. Consequently, a dispute has arisen due to the unclear terms of the agreement.
Despite the settlement agreement signed in August 2020, requiring Goldman Sachs to make a US$2.5 billion cash payment and provide a US$1.4 billion asset recovery guarantee, the task force is still in the process of seeking arbitration to resolve the matter.
Johari emphasised that the process of obtaining the US$1.4 billion recovery asset guarantee depends on Goldman Sachs’ decision to either fight the Malaysian government’s claim through legal proceedings or settle the matter. However, he cautioned that the resolution process might be lengthy, given the substantial amount of money involved.
The dispute stems from Goldman Sachs’ attempt to offset fines imposed on AmBank and a settlement agreement with the International Petroleum Investment Company (IPIC) as part of the US$1.4 billion asset recovery guarantee. While Goldman Sachs contends that its obligations have been discharged through these payments, the Malaysian government disputes this assertion.
